Aspen Club has more than $21 million in liens piling up
The Aspen Times
Anna Stonehouse/The Aspen Times |
Club has until end of October to resume work, or city could step in
If construction doesn’t resume on the Aspen Club after 60 days of the stoppage, the city could tap into a $100,000 escrow account to spruce up the site while ensuring that it has no safety hazards.
Work on the Aspen Club was suspended at the end of August, and the city is keeping an eye on whether it will be restructure its financing in order to resume the work.
“They’re not behind closed doors or anything, and they’re keeping us apprised of the process,” said the city’s Jessica Garrow, who oversees the Community Development Department.
Garrow noted that part of the Aspen Club’s approvals from the city included a requirement that it deposit $100,000 into an escrow account the city could access in the event of a construction work suspension lasting 60 days or longer. Ordinance 2, from 2010, is an approval for the project that says in case 60 days were to elapse after stoppage on the Aspen Club redevelopment project, “the city in its discretion may draw upon Escrow Funds from time to time as needed for purposes of protecting and securing the Project site and improvements from damage by the elements and/or from trespass by unauthorized persons, and for purposes of improving the Project site to a safe condition such that it does not become an attractive nuisance or otherwise pose a threat to neighbors or other persons.”
The Aspen Club isn’t the only development the city requires have an escrow account in the event of a construction work stoppage.
When the Great Recession was in full force, Aspen was home to a few unsightly holes in the ground — the Dancing Bear, for example — that were the result of unfinished construction projects due to financing that dried up.
Aspen responded in 2013 with an ordinance stating that the “City may require” certain owners or developers of a project to deposit cash into an escrow account that the city could access 60 days after stalled construction.
Based on her conversations with the main figures behind the Aspen Club redevelopment, Garrow said she is encouraged that the city won’t have to tap the escrow account.
Aspen Club owner Michael Fox, in an email to The Aspen Times, said: “At this time there is no need to draw on this money.”
The general contractor overseeing the redevelopment of the Aspen Club, a high-profile construction project on hold due to finance restructuring, filed a lien Tuesday claiming it is owed $17.7 million for its services.
PCL Construction Services’ mechanic’s lien, which was entered in the Pitkin County Clerk & Recorder’s Office, was the ninth filed against the Aspen Club since it halted construction in August.
As general contractor, PCL is responsible for paying off its subcontractors on the job.
PCL vice president Mark Harms said from the Alberta, Canada-based firm’s Denver office the lien was filed simply to protect the company’s rights.
“We’ve been working with them [Aspen Club] on a number of solutions to get started back up, and basically we’re waiting on direction from them,” he said. “It’s in Aspen Club’s court to give us direction.”
Since Sept. 12, eight subcontractors have filed mechanics’ liens against both PCL and the Aspen Club. Among the subs filing liens is Basalt-based Meyers & Co. Architectural Metals, which claims it is owed $1.528 million for labor and materials.
Tracy Forristall, the chief financial officer for Meyers & Co., said Tuesday the firm won’t resume work at the Aspen Club until it is made whole.
“We’ve been in contact with both of them [Aspen Club and PCL], and we think it’s a great project and the financing will work out,” she said.
Forristall said her confidence that construction will resume is in part “because the economy is good, it’s a great project, and I think it’s a hiccup in the project right now.”
The lien was filed, she said, because “that’s just part of the business you do to protect yourself.”
Harms said, “Everyone that files a mechanic’s liens is protecting their legal rights, and now we’re in a wait-and-see mode.”
Michael Fox, who has owned The Aspen Club since 1996, was traveling this week and could not be reached by telephone. He did, however, offer a set of short responses to emailed questions from The Aspen Times, offering that the debts would be paid off once the project’s revised financial model is in place.
“We are in the process of obtaining refinancing,” he wrote. “Because of confidentiality with our lenders, I can’t say much more.”
Data at the Clerk & Recorder’s Office show some of the project lenders include FirstBank, which provided a $45 million loan in May 2016; InvestAmerica Aspen Club, which loaned the club $32 million in September 2015; and Revere High Yield Fund, which has a $12 million loan to the club dating to June 2015.
Other lienholders include Western States Fire Protection Co. ($170,493) of Centennial; Denver-based Martin-Ray Laundry Systems ($21,101); Orion Environmental Inc. ($63,278) of Commerce City; New Castle-based PSI Crane & Rigging Inc. ($302,822); Gould Construction ($1.7 million) of Glenwood Springs; IMI Inc. ($167,215) of Littleton; and Insulvail ($102,942) of Gypsum. Both IMI and Insulvail filed their liens near the end of Tuesday’s business day.
The combined amount in lien claims totals more than $21.7 million. Fox said those debts would be satisfied.
“These will be paid off as part of our refinancing, if not sooner,” he wrote.
Construction began on the redevelopment in January 2016, with temporary closures in different parts of the club allowing it to stay open until April 2016. It has been closed since then because of construction work, while members of the health club have used reciprocal benefits at other establishments in the Aspen area.
The project has city approval for a remodeled 40,000-square-foot Aspen Club & Spa building. Also included is a 54,000-square-foot lodge with 20 timeshares, which comprises 36,000 square feet of townhouse units and 18,000 square feet of club units. Another 13,600 square feet of development would account for 12 multi-family affordable housing units.
Construction initially had been billed to be finished in November.
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